Car sales in Vietnam expand for three consecutive months

The number of cars sold in Vietnam slightly increased by 0.3% month-on-month to 24,065 units in July but decreased 13% year-on-year, according to monthly data from the Vietnam Automobile Manufacturers Association (VAMA). 

The figure, however, marked the positive growth in car sales number for three consecutive months following growth of 103% month-on-month in May and 26.4% in June.

Number of car sales in seven-month period. Source: VAMA.

The volume included 17,593 passenger cars, up 0.1% inter-monthly; 6,133 commercial cars, up 0.4%; and 339 special-purpose vehicles, up 10%. 

The sales volume of locally assembled cars in July was 16,088 units, up 2% against the previous month, and that of imported cars was 7,977, down 2%.

Overall, car sales in Vietnam in the January–July period dropped 28% year-on-year to 131,248 units across all segments. Upon breaking down, 94,275 were passenger cars, down 29% year-on-year; 34,821 were commercial vehicles, down 23%; and 2,152 were special-purpose vehicles, down 39%. 

Sales of domestically assembled cars reached 83,604 units during the period, down 22% compared to the same period of last year, while imported completely-built-units (CBUs) totaled 47,644 units, down 36%. 

Sales of imported cars down 36% year-on-year in January - July. Source: VAMA.

Truong Hai Auto Corporation (Thaco) led the market in the first seven months with 42,589 units sold, followed by TC Motor with 35,620 and Toyota with 30,484.

Automobile is considered a key industry in Vietnam, accounting for approximately 3% of the national GDP. However, this industry was severely impacted by the Covid-19 pandemic, with Viet Dragon Securities Company predicting a decline of 15% in sales volume this year compared to its prevision earlier this year.

The government has been adopting a number of supporting policies to boost sales of made-in Vietnam cars in the remaining months of the year, including the decision to slash the registration fee for domestically-produced cars by 50%, effective from June 28, and extend the deadline for payment of excise taxes for domestically-produced/assembled cars until late 2020.

From July 10, 2020, the government’s Decree No.57 amending and supplementing Decree No. 122, allows domestic assembling companies (meeting standards) to be entitled with 0% import tariff on raw materials, components and supplies which cannot be produced locally. The move is set to reduce production costs by 2-5%, so that selling prices can be consequently lowered in order to boost demand.